Small business optimism continues at record high numbers, rising to 107.6 in February, according to the NFIB Small Business Economic Trends Survey. The historically high numbers include a jump in small business owners increasing capital outlays and raising compensation.
“When small business owners have confidence and certainty in the economy, they’re able to hire more workers and invest in their business,” said NFIB President and CEO Juanita Duggan. “The historically high readings indicate that policy changes – lower taxes and fewer regulations – are transformative for small businesses. After years of standing on the sidelines and not benefiting from the so-called recovery, Main Street is on fire again.”
For the first time since 2006, taxes received the fewest votes as the number 1 business problem for small business. The February report shows several components of the Index reached noteworthy highs. In a sign that small businesses are confident and expect growth, owners are spending capital with a net 22 percent planning to raise worker compensation and 66 percent reported capital outlays, up 5 points from January and the highest reading since 2004.
Moreover, owners expecting higher real sales rose 3 points to a net 28 percent, one of the best readings since 2007. Owners also reported higher nominal sales in the past three months at a net 8 percent of all owners. The net percent of owners reporting inventory increases rose 3 percentage points to a net 7 percent on top of a 6-point rise in January.
“Small business owners are telling us loud and clear that they’re optimistic, ready to hire, and prepared to raise wages – it’s one of the strongest readings I’ve seen in the 45-year history of the Index,” said NFIB Chief Economist Bill Dunkelberg. “The fact that several components saw significant increases tells us that small businesses are flourishing in a way we haven’t seen in over a decade.”
Job creation remained strong in February, as reported in the NFIB February Jobs Report, released last week. Finding qualified workers remained as the number one problem for small business owners, surpassing taxes and regulations which have held the top two spots for years.